SALT LAKE CITY, UT - APRIL 26: A pile of Bitcoin slugs sit in a box ready to be minted by Software engineer Mike Caldwell in his shop on April 26, 2013 in Sandy, Utah. (Photo by George Frey/Getty Images)

Bitcoin Value Plummets After Hacking Heist

The Bitcoin currency experienced a bump in the road this morning as it was revealed that Hong Kong based Bitcoin exchange Bitfinex reported that hackers had stolen 119,756 Bitcoins. This is one of the largest hack in the Bitcoin’s history, and highlights one of the flaws of the digital currency–namely the varying security of the different Bitcoin exchanges.

The theft amounts to about $77 million at the time of the heist when the Bitcoin currency was valued at $650 per Bitcoin. Shortly after Bitfinax reported the breach, however, investors sold off quantities of Bitcoins and the value plummeted to $440 before rallying back up to around $550 by the end of the day on August 3.

Bitfinex took their site down to investigate what had happened and to figure out a solution to amend damages caused by the breach and by the consequent drop in Bitcoin value. According to Zane Tackett the Bitcoins were stolen from users’ segregated wallets.

Although hacking seems to be common for Bitcoins, it hasn’t really affected the currency’s long term value. It has risen steadily throughout the year. The Bitfinex breach does not expose any weaknesses in the security of a blockchain, which is the technology that processes and generates Bitcoins. It is also still unclear whether or not the hackers were able to gain access from outside, or if it was an inside job.

Unfortunately it looks like this will spell the end for Bitfinex as they attempt to recoup losses.

User breakup7532 made an observation on Reddit that perhaps the hackers were waiting for price fluctuations in the value of the Bitcoin in order to take advantage of those who were putting up Bitcoins on the exchange in preparation for a sale.

U gotta consider a huge % of ppl had their coins on there for literally less than 24 hrs as they wanted to prep for a sale with the price drop.

Me included. I never keep coins on exchanges. The hacker was smart. Strike during volatility for high volume.

The largest Bitcoin hack was in 2014 after MtGox was taken for almost $650 million dollars worth of Bitcoins. The term “goxxed” or “goxxing” is now becoming parlance for a big Bitcoin hack.

One user on Reddit claimed that their entire life savings of 12 years was sitting on Bitfinex at the time of the hack. Whether that was a prudent decision is irrelevant, however the fact remains that it was a huge breach and many users were affected.

Did you have any Bitcoins stolen in this hack? Do you use Bitcoins at all? What are your opinions on the digital currency? Leave a comment below.